Monday, March 13, 1995
Chiron as consolidator
Chiron Corp.'s $95 million move to combine its Chiron Vision business with the
ophthalmic surgical division of Iolab aims to create a deep product line capable of
providing a disease management approach to the sector.
CHIR last week said it would acquire the Iolab division from Johnson & Johnson for $95
million, creating the second largest ophthalmic surgery company after Alcon.
Iolab has been for sale since last year, and Ciba bought the pharmaceutical portion of the
business last August. CHIR, in which Ciba holds a minority position, said it anticipates
collaborating with Ciba Vision.
CHIR will pay slightly less than 1x sales for Iolab. The Emeryville, Calif., company will
use $55 million of its own cash and is borrowing $40 million to pay for the rest.
Iolab was marginally unprofitable in 1994, with sales slightly above $100 million.
Similarly, Chiron Vision also was unprofitable, with sales of $106 million.
The ophthalmic surgery business has been under cost pressure and has been a highly
fragmented field, according to CHIR spokesperson Larry Kurtz. In addition, reimbursements
for intraocular lens procedures have been declining. As a result, it's been difficult for
companies to make money and the sector has been consolidating, Kurtz said. Chiron Vision
has been participating in the trend, already acquiring the German company Adatomed,
IntraOptics, a producer of intraocular lenses